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Specialty Food in 2018: Tea, Tacos & Tang

This weekend, New York City welcomed the Summer Fancy Food Show for another year of specialty foods and beverages. Despite fierce competition from the Fourth of July weekend, the World Cup, and the scorching weather, hundreds of exhibitors lined up to show off the lastest and greatest food/beverage trends.

Check out our take from last year’s show here with more numbers from the specialty food industry.

The Specialty Food Association (SFA) estimates that retail sales of specialty foods grew 11% over the two-year time span between 2015 and 2017, reaching $140.3 billion. According to SFA’s annual report, specialty food sales outpaced the growth of all food at retail—growth for the former was up 12.9% vs. 1.4% for the later.

Distribution of specialty foods also grew increasingly diversified; U.S. sales through foodservice increased 12.8%, online channels by 21%, and brick-and-mortar by 10.7%. According to exhibitors TLL spoke to selling licensed goods on the floor, discount distributors also saw tremendous growth for lower-prices, bulk confectionery as well as healthy snacks.

The SFA estimates that 65% of consumers purchase specialty foods, with 79% of those aged 18-23 buying specialty foods, 67% of Millennials (24–41), 65% of Gen Xers (42–53), and 60% of Boomers (54–72).

At just over $4 billion in market size, cheese is the largest share of the specialty foods business, followed by frozen/refrigerated meats, poulty, and seafood ($3.84 billion) and chips, pretzels, and snacks ($3.82 billion). The top five growth categories under the specialty foods banner in 2017, as compared to 2015, are:

  1. Water (+76.1%)
  2. Rice cakes (+64.1%)
  3. Refrigerated RTD tea and coffee (+63.2%)
  4. Jerky and meat snacks (+62.1%)
  5. Shelf-stable creams and creamers (+61.7%)
Top 10 Specialty Foods/Beverages, By Market Size, U.S., 2017
Data Source: Specialty Food Industry (SFI)
(Figures in Millions)
Food/beverage Total Market, 2017 Change, 2015–2017
Cheese and plant-base cheese $4,005 6.6%
Frozen or refrigerated meat, poultry, and seafood $3,841 3.3%
Chips, pretzels, and snacks $3,822 11.8%
Non-RTD coffee and hot cocoa $3,329 5.4%
Bread and baked goods $3,058 18.1%
Chocolate and other confectionery $2,368 10.8%
Yogurt and kefir $2,229 41.6%
Frozen desserts $2,227 41.6%
Refrigerated entrees $2,147 27.2%
Frozen lunch or dinner entrees $2,143 13.1%

In 2017, retail sales of specialty foods grew at a faster rate than did licensed foods (10.5% versus 6.0% growth compared to 2016). But a clear comparison between the two categories of food/beverage goods is difficult for one simple reason: They overlap.

As part of an overall trend, it is interesting to note just how informed and concerned consumers of specialty foods are. Education is still a large part of the specialty industry’s way of doing business, ranging from sustainability (does a honey brand fight to save bees?) to transparent labeling.

One of the bigger concerns noted amongst exhibitors of all types this year was the packaging their food came in; namely, how to fit all the better-for-you markers (high protein! high fiber! all natural! no added sugars! vitamins and minerals!) on the front. And then, how to get the most simple, readable terminology on the back.

Teas: From Matcha to Botanicals

Ready-to-drink (RTD) offerings continue to grow at at breakneck pace—cold brew coffee, tea, juice, vegetable blends, water, yogurt, and alcoholic beverages.

This year, the floor was also welcoming to do-it-yourself offerings. Just in terms of coffee, attendees could field samples of whole beans (raw and roasted), instant blends, K-cups and other pods, and cold brew beanies.

For tea, the breakout flavor was matcha—from the traditional powder, to hot brew tea packets, to cold brew pods. But consumers are also thirsty for raw tea, as well as white, red, black, and other (such as yerba mate) varieties.

Botanical, naturally uncaffienated infusions were also big, with a growing number of people seeking to self-mediate (self-care) with natural, “healthier”, alternatives to energy drinks and prescription pills. A number of attendees boasted new or expanded lines of teas meant to cure various ills (energy, sleep, calm, focus, with some even promising better “performance” during bedroom activities).

One interesting variant on the tea trend was mixers and beers brewed from organic tea and botanicals.

Tacos, Wraps & Layers

If you must eat something in 2018, it best be wrapped up in something else. Not like a sandwhich, though—bread is so blasé—but everything from cheese folios to gluten-free tortilla wraps made from alternative flours was available.

Snack and protein bars have also stepped up their game, with consumers preferring to have a little fun with whole, cruncy ingredients layered on top of soft, filling spreads.

Tang for Miles

In 2018, the flavor profile of choice is loud, bold, and confident. Tangy flavors are being embraced much more widely, although spice (chili, jalapeño, pepper, etc.) remains an outsized presence.

To this end, sauces were everywhere on the floor. Tasting them was an interesting experience in itself, however, as many exhibitors skipped plain bread and instead choose to show off their wares on cheeses or crackers to demonstrate how each emphasized certain flavors.

In the same way, sour vinegar and fruit preserves meant to enhance the flavor of cheese (or some gluten-free alternative), had

For foodies that don’t want to bother with a dip—no worries. There were plenty of chips, tortillas, puffs, and bites that packed enough punch on their own.

Mushrooms and meats were much more prominent on the floor this year,  boasting full-bodied, mature flavor profiles. Dry snacking meats and jerkies continue to prove popular.

And There’s More!

Ancient grains have have long been a cornerstone of the specialty food market, and this year quinoa was the MVP. We saw it in every form—whole, as a flour, and in mixes with foods like mac and cheese, oatmeal, salads, and snack bars.

Alternative flours beyond the ancient grains were also in attendance—cauliflower, coconut, and even sunflower seed.



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